Tesla is in talks to build R&D center in India, report says

Tesla is reportedly in talks to build a research and development center in India — a market that Tesla has had difficulties entering in the past.

Back in 2016, CEO Elon Musk said that Tesla had plans to enter the Indian market, but those plans have been delayed.

Jay Vijayan, who was then Tesla’s Chief Information Officer and was born in India, went to the country to investigate the possibility of Tesla starting to import cars in India.

After that, there was some confusion over Tesla’s ability to even import its vehicles in India in 2016.

At the time, Musk expressed concerns about local regulations forcing foreign retailers to source 30% of their parts locally that could prevent a launch.

The commerce and industry ministry responded to Musk telling him that he was wrong, but they actually assumed that Tesla would open a factory in India in order to sell cars in the country, but like almost all markets outside the US, Tesla first planned to import vehicles.

Last year, Tesla was rumored to be showing interest in a battery factory project in India.

Now, a new report came out stating that Tesla held talks with the Karnataka government in India to establish a research center (via India Times):

“Tesla held exploratory discussions with Karnataka government officials on September 10, who are seeking a possible investment by the world’s most valuable carmaker in a research facility in Bengaluru, people familiar with the development told ET. A followup meeting is expected later this month, they said, during which the state officials are expected to present a detailed proposal to the Tesla executives.”

Bengaluru is a big industry center in India with already several automakers there.

Tesla could be trying to tap into the local talent or local activities could also help the automaker entering the market with its vehicles.

India’s automotive market is hungrier for smaller and cheaper vehicles than is available in Tesla’s lineup.

However, Tesla has recently been talking about producing a smaller and cheaper electric hatchback.

Electrek’s Take

This new vehicle is supposed to be designed and manufactured in China.

I wouldn’t be surprised if Tesla brings the vehicle to market in China and it proves to be successful, it would then try to replicate the success in India.

It would solve the problems with regulations and having a vehicle that matches the market.

Tesla would have local production and a vehicle that is cheaper and better fit for the Indian market.

What do you think? Let us know in the comment section.